Starting new Quickbooks file for an old company.

Although this is an old business with a new quickbooks file, we are actually closing the legal entity of the old company and starting a new company. We don't want any balances carried over from the old company. We essentially want to take the inventory from the 'old' company and put it into the 'new' company. Also, all the customers will start off with $0 balances. Is it as simple as that, or am I missing any key concepts?

I found this response from Rustler and it 99% answered my question:

Do a physical inventory, set the total value for the qty on hand for each item.create the inventory items, you can do that via excel and import them, Bring up inventory adjust, set the adjusting account to opening balance equity, click through any warning boxes.Enter the new total value for the item then enter the new qty do that for each item.That will put the cost of the items in QB, and the total of inventory will be in opening balance equity as it should be.Create all bank accounts and enter an opening balance - that also puts the asset value in opening balance equity automatically.

You will need to do journal entries to allocate opening balance equity to the owners, see this entry and the one that follows it in the tag list on the left.

We have done our physical inventory and are ready to enter the quantities. My question is if we use the Opening Balance Equity account, will inventory subtract and be accounted for properly? COGS etc.. We are a VERY small company and have never had need for a CPA or accountant. I am learning bookkeeping 101 on the fly.

Starting new Quickbooks file for an old company.

We have done our physical inventory and are ready to enter the
quantities. My question is if we use the Opening Balance Equity account,
will inventory subtract and be accounted for properly? COGS etc.. We
are a VERY small company and have never had need for a CPA or
accountant. I am learning bookkeeping 101 on the fly.

Opening balance equity is just what it says, the starting value of the items and any other accounts. When all starting balances are entered then you clear OBE to equity using a journal entrydebit OBE and credit equity

I recommend you have the following for owner/partner equity accounts (one set for each partner if a partnership)

[name] Equity (do not post to this account it is a summing account)>> Equity>> Equity Drawing - you record value you take from the business here>> Equity Investment - record value you put into the business here

Posting to COGS is a function of sales. when you sell the item, several things happen, the qty sold is removed from stock, the average cost of the items sold is removed from the item total value and posted to COGS, the sales price is posted to the income account you choose on the item screen.

Starting new Quickbooks file for an old company.

We have done our physical inventory and are ready to enter the
quantities. My question is if we use the Opening Balance Equity account,
will inventory subtract and be accounted for properly? COGS etc.. We
are a VERY small company and have never had need for a CPA or
accountant. I am learning bookkeeping 101 on the fly.

Opening balance equity is just what it says, the starting value of the items and any other accounts. When all starting balances are entered then you clear OBE to equity using a journal entrydebit OBE and credit equity

I recommend you have the following for owner/partner equity accounts (one set for each partner if a partnership)

[name] Equity (do not post to this account it is a summing account)>> Equity>> Equity Drawing - you record value you take from the business here>> Equity Investment - record value you put into the business here

Posting to COGS is a function of sales. when you sell the item, several things happen, the qty sold is removed from stock, the average cost of the items sold is removed from the item total value and posted to COGS, the sales price is posted to the income account you choose on the item screen.

Starting new Quickbooks file for an old company.

Thank Rustler, I am almost there. So if I do the above, will the entry just stay in the equity account once I move them from OBE? I may very well be over thinking this. How does QB know the entry I just moved to equity is inventory dollars?

Starting new Quickbooks file for an old company.

It does not matter that the entry in OBE is inventory or fixed assets you added, or bills, or - but you can drill down on the transaction to find out if you had to.it is not dollars, it is value. dollars are held in a bank account.

equity is the total value of all assets (dollars and the value of inventory, etc) less the total value of all debt (liabilities)